WeWork announces a 1-for-40 reverse stock split to retain the New York listing

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WeWork will swap 40 of its existing shares for one new share to bring its share price back above the $1 threshold required to remain listed on the New York Stock Exchange.

Shares of the American office space company fell nearly 20 percent to less than 13 cents on Friday, after shedding 99 percent of its value from a peak of $13.71 in April 2021. Less than $300 million.

While WeWork’s decision to move forward with a reverse stock split should address the issue around compliance with the NYSE’s continuing listing rule, the company still faces larger challenges to deal with. The group warned earlier this month that it faced “significant doubts” about its ability to continue as a going concern.

WeWork said in a statement on Friday I did not expect A stock’s reverse split “to affect its current or future business operations”. This move will take effect after the market closes on September 1.

The company’s stock price first closed below $1 on March 10, and has — with the exception of one session later that month — stayed below that threshold since then, according to Refinitiv data.

WeWork received a notice from the New York Stock Exchange in April saying the group’s share price did not comply with the exchange’s listing requirement that the price remain above $1 over 30 consecutive days of trading. She had six months to correct the violation.

The company later decided to pursue a reverse stock split, with shareholders voting in June to approve the move. At the time, the company suggested taking the procedure at a ratio of between 1 in 10 and 1 in 40.

WeWork attempted to take it public with an initial public offering in 2019, but its failure to do so led to co-founder Adam Neumann’s ouster. The company eventually listed on Wall Street in 2021 by merging with the blank check company in a $9 billion deal.

The company has been overhauling its cash-burning business since its failed IPO attempt, having exited or amended nearly 600 leases, cutting nearly $13 billion in future lease obligations. The company said earlier this month that its viability depended on another restructuring and the search for more capital over the next 12 months.

WeWork’s second-quarter results were below its guidance just three months after a restructuring that reduced its debt by about $1.2 billion. At the end of June, it had $690 million in cash, including $205 million in cash.